by Hasina Razafimahefa, Senior Manager, ESG Evaluations & Proxy Voting.

We voted 728 annual general meetings at companies around the world during the year’s peak proxy season, which runs from January to the end of June.

Editor’s note: This article first appeared in our Active Ownership Report from Q2, 2022 

Climate change, inequality, and human rights maintain their standing as top concerns among investors, in line with our own focus themes. Alphabet, Amazon and Meta Platforms led the way with high numbers of shareholder proposals on their ballots. Below we break down the categories with a preliminary focus on shareholder proposals. We will report more on proxy voting season in the weeks ahead.

Prescriptive climate proposals face challenges

 Companies are under mounting pressure to act on climate, whether that means setting emissions reduction targets, offering an advisory vote on climate strategy, or committing to net zero. Over two-thirds of the shareholder resolutions focusing on companies’ net-zero transition plans were targeted at financial institutions and energy companies. Of the 49 climate-related proposals we voted on, four passed. Average support for the category was just under 20%.

Resolutions related to plastics received relatively higher support with an average of 30%. We made significant progress at Amazon, where we co-filed a proposal asking the company to produce a report on their effort to reduce plastics use. Company filings show the proposal achieved 49% support of all shareholders, which is approximately 59% support of independent shareholders—enough to send an exceptionally strong message.

Growing support for equity audits

 Inequality-related proposals focused mostly on racial equity and civil rights audits, which garnered majority support at more companies since their emergence last year. There were also proposals to improve transparency on diversity, equity and inclusion at different levels of the organization, and to improve disclosures on pay equity and enhance human capital practices, including adopting paid sick leave and producing reports on use of concealment clauses.

Partial win on human rights at tech companies

 One of the key ongoing requests of shareholders is that companies conduct a human rights impact assessment, including within the supply chain. This would reveal details about effects on Indigenous rights, child and forced labor, and migrant workers and contractors. In this context, we co-lead filed (as part of a group of lead filers) a human rights resolution at Alphabet, and co-filed (we supported the lead filer) one at Meta. Due to the dual class share structure at these companies, which gives company insiders majority control over any vote, the resolutions did not pass. We are pleased however the Alphabet proposal received majority support of independent shareholders.

 

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